Who is my customer?
Identifying priorities in a SaaS company
This past weekend I spent some time with the cofounders of an early stage start up, looking over their draft vision and mission materials. As I was reviewing the summaries, I was struck with a perplexing hurdle, the identity of the customer wasn’t clear. Without a clear customer, it was difficult to settle on a vision or a mission statement. Building any product without a clear customer in mind is like designing a custom house for an unknown client; there is a lot of room for expensive errors and waste.
First, identify the core pillars.
We jumped on a call to talk this through. I explained that most software companies can identify three primary pillars of focus: (1) Product, (2) Revenue, and (3) Team. These three areas help bring structure to a company’s design and execution plan, including setting OKRs and agreeing on KPIs, all while making decisions easier to navigate (the best decisions are great for all three stakeholders, the users, the investors, and the employees).
Most early stage companies with which I work prioritize product among these three, and appropriately so. Without a good product, the quality of the team and revenue are short term at best. “Make a good product and the money and people will follow” is a commonly heard mantra in Silicon Valley and beyond.
Next, identify your set of customers.
If in fact product takes priority, the next key step is identifying the primary customer. Founders will often insist there isn’t one, the cure product is being built to solve several problems at once. Those with whom I’ve worked know I press on this. Is the primary customer the user who gets a product for free? Is it the industry that is being disrupted for the long term benefit of all? Or, is it the traffic generators, advertisers, information offerers, data collectors, or institutions? This is a tough question for most. To answer it, it’s critical to identify which customer cohort is essential to the growth and sustainability of the company for the long term.
While at Flipboard, for example, in our early years of growth, we were constantly balancing the interests of three types of customers, our publisher partners, the advertisers, and our readers. The product would look very different depending on which cohort we treated as the most important. For example, a mobile content product that favors the interests of the advertisers is heavy on personalized and steady advertisements while a product that prioritizes interests of publishers might redirect readers to paid content or subscription offerings, with few or no advertisements. When we prioritized our readers and treated them as our customers, we were well positioned to build a product that was on a growth trajectory with the other cohorts benefitting as a result. As more and more readers came to get their information from Flipboard, the publishers were able expand their reach and discoverability while advertisers had broader, more valuable audiences to tap into. It didn’t hurt that we made sure their content was palatable for the readers as well, even if that meant occasionally turning away the short-term advertising revenue to preserve a longer term rapport with our readers.
In another much earlier stage start-up, the founder wanted to develop the product for an enterprise customer (with money to spend) then pivot to an individual consumer offering in time. While this might make sense for the near term, developing with the awareness that your primary customer will change introduces numerous complexities to the development, marketing and sales processes. What works for the HR team at a large company rarely works for an individual user. Ideally a team can identify the primary customer early on and stick with it.
Once you know your customer, put them at the center.
Once you’ve identified your “core” customer, you can put them at the center of decision making. This makes everything easier. Design, distribution, marketing, press, investor relations materials, you name it — once your customer is clear, everything else has to be too.
In addition to team alignment, you can do this by making sure your customer is represented in product decision-making within the company’s operations. Some companies have “UX” leads who represent user experience. Others simply rely on the team members’ use and feedback on the product. Still more rely on external feedback channels, such as proprietary email or surveys — or even Twitter. However you do it, once you know who you are building for, the output will end up being superior. Your target customers will be entering an experience that feels like a house build just for them — and they’ll keep coming home.
